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Thursday, August 14, 2014

Reasons Why the Keystone XL is a Pipedream

The reasons why the Keystone XL pipeline will be rejected are increasingly convincing. Although there have been a lot of arguments proposed on both sides of the issue, certain factors have recently come to light that suggest the pipeline may never see the light of day. ____________________________

After a seemingly endless succession of arguments for and against the pipeline, some compelling reasons have emerged that
suggest the Keystone XL (KXL) may not be completed after all. If it is completed,
the KXL would ferry 825,000 barrels of tar sands oil per day from Alberta to the
Gulf of Mexico.

The combination of protest, legal wrangling, an expired permit,
President Obama’s climate initiatives, further regulations, harmful impacts, and
market forces are making the road forward for the KXL much more difficult.

1. Protest

The chorus of those opposing the KXL is increasingly well
organized. Opposition comes from groups that range in size from small scale
local grass roots protests to highly organized national campaigns. A total
of two million people submitted comments to the State Department urging that the
KXL be rejected. Opposition also comes from ten Nobel Laureates who have sent a
letter to President Obama and the Secretary of State urging them not to move
forward with the KXL.

Young people are at the forefront of protests. This new generation is
increasingly standing up to express their opposition to the pipeline project.
This was evident in the faces of the thousand students who protested in front of
the White House earlier this year.

There are 74 million people in the U.S. that are in the 18-34 year old group.
These also make up the cohort most likely to suffer the worst impacts of climate
change. This new generation understands the perils of climate change and
they are increasingly advocating for a shift’away from fossil fuels towards
cleaner forms of energy. While the youth may be at the forefront of calls to
kill the KXL, this is truly an intergenerational movement of climate
defenders.

Protests against the pipeline continued with the Cowboy & Indian Alliance
march on Washington in April. The alliance of farmers, ranchers, and tribal
communities came to Washington DC to voice their opposition to the Keystone
project.

2. Legal wrangling

On Thursday June 26th, 2014, the Supreme Court of Canada rendered a ground-breaking decision that
recognizes the land claim of a B.C. First Nation. This precedent setting ruling
will most certainly impede the expansion of fossil fuels in Canada and make the
building of pipelines far more difficult. The unanimous ruling granted B.C.’s
Tsilhqot’in First Nation title to a 1,700-square-kilometer area of traditional
land outside its reserve. The decision sets a game-changing precedent. Going
forward, logging, fossil fuel extraction and mining operations on or near
aboriginal lands must have the consent from affected aboriginal groups.

The Supreme Court decision states that the government has a duty to consult
and accommodate First Nations. If the First Nations group does not consent, the
government can only go against its wishes if it proves it’s justified under the
Constitution.

3. Expired permit

On June 29, TransCanada’s permit to build the Keystone in South Dakota
expired. The permit from South Dakota Public Utilities Commission authorizes
TransCanada to build the KXL. This means that TransCanada will have to go
through the application process all over again. However, this time, there is
likely to be considerably more organized opposition.

4. President Obama

Putting an end to the KXL is a legacy issue for the President. Failure to act
will imperil the lives of future generations and ultimately undermine his
legacy. It is also a matter of consistency and integrity. Last summer, President
Obama made a statement that makes the building of the pipeline hard to justify.
He said he would reject the pipeline if it was proven that the KXL has an
adverse climate impact. Since then, a large number of scientists, economists,
and other experts have put forth a compelling case demonstrating the deleterious
environmental impacts associated with the pipeline.

It is difficult to reconcile moving forward with the KXL in light of the
President’s recent move to restrict emissions from power plants through the
Environmental Protection Agency. It is hard to envision how he could reduce
emissions from coal plants while at the same time giving the green light to a
pipeline that would expand one of the world’s most destructive carbon bombs.

5. Further regulation

Widely anticipated government regulations will further erode the
attractiveness of the tar sands. Rail industry regulations on the transport of
fossil fuels will help minimize dangerous accidents while driving up the costs.
Perhaps the most effective way of reigning in the tar sands involves some form
of carbon pricing. The imposition of a carbon tax or cap-and-trade would also
inflate the price and go a long way towards curtailing tar sands expansion.

6. Harmful impacts

The threat from the changing climate and environmental damage caused by
fossil fuels is widely documented. There is a consensus among climate scientists
that if we continue to burn fossil fuels, burgeoning levels of carbon dioxide
will worsen extreme weather, raise
sea levels and create mass extinctions. This point is particularly true of
tar sands bitumen, which is among the world’s most destructive sources of
energy

Burning fossil fuels already contributes 33.4 billion metric tons of carbon
dioxide (CO2) per year. This is destined to get far worse if the tar sands play
an expanded role to meet growing energy demand. The world’s energy needs are
expected to rise by about a third over the next 20 years.

We have already reached dangerously
high levels of CO2 in our atmosphere and we simply cannot afford to continue
down this perilous course without incurring catastrophic consequences.

The Canadian province of Alberta has tar sands reserves equivalent to 168.7
billion barrels. This is more than the reserves of Iran, Iraq, Kuwait and
Russia. Turning the tar sands into usable fossil fuel products is very energy
intensive. Conservative estimates suggest that tar sands bitumen is 14-20
percent more energy intensive than traditional oil.

A recent study has concluded that the annual carbon emissions from the
pipeline will be four times the amount that the State Department predicted in its
report.

Another report titled Fail, indicated that
approving the KXL would increase U.S. greenhouse gas emissions by 181 million
metric tons each year. That represents an equivalent climate impact of 51 coal
plants or 37 million cars.

The Keystone XL is expected to leak 91 times over its lifetime, which poses
serious risks to land and water, including some of the most
sensitive aquifers in North America. The KXL also directly threatens farmers,
ranchers, and those who live near the proposed pipeline corridor.

The carbon load form the KXL is not just a local issue, it has global
implications. If the pipeline is allowed to go forward, it will make it that
much more difficult to keep temperatures below the internationally agreed upon
upper threshold limit of 2 degrees Celsius. This imperils the lives and
livelihoods of billions of people around the world.

7. Market forces

There is a growing awareness that fossil fuels and the tar sands in
particular are increasingly risky and as such, not as attractive an investment
as they used to be. A confluence of factors are already coming together to make
the KXL less attractive to investors. The protests and the risk of a carbon
bubble are part of the equation that is reducing the ROI. Investment in the oil
sands have already dropped off and there is shrinking foreign investment
in Canada’s oil patch in general.

Rejecting the Keystone XL will increase the costs and help market forces to
diminish the economic viability of tar sands expansion. Pipelines are the most
cost effective way of transporting large volumes of crude. If it is completed,
the KXL could transport more than 800,000 barrels per day. Rejecting
the pipeline would significantly restrict the amount of tar sands oil that could
be moved to market.

Maximilian Auffhammer, a University of California economist estimates that in
if no new pipelines are built, up to ten billion barrels of tar sands oil will
stay under ground.’a0

“If no pipelines get built within and out of Canada and one has to rely on
this rail scenario, capacity would run out this year and roughly 10 billion
barrels stay in the ground,” Auffhammer says. “Not building Keystone XL would
make the rail capacity constraint binding and therefore lead to slower
extraction even in the short run.”

In the absence of the KXL there is insufficient transport capacity to realize
the supply projections by Canadian Petroleum Producers. This holds true even if
all other projects are built and rail capacity grows.

The growth of price competitive renewable energy will further undermine the
viability of tar sands oil extraction. The proliferation of natural gas from
fracking has decreased the need for Canada’s tar sands. This takes the wind out
of the sails of one of the most powerful arguments put forth in support of the
pipeline.

These are but seven of many good reasons why the Keystone XL may never be
completed. Rejecting the KXL will signal an important step forward in our
efforts to chart a new course where climate change and pollution are an integral
part of policy decisions.